A Fibonacci retracement is a key technical analysis tool that uses percentages and horizontal lines, drawn onto price charts, to identify possible areas of support and resistance. Identifying these areas is useful to traders since it can help them decide when to open and close a position, or when to apply stops and limits to their trades.
A fiat currency is a national currency that is not pegged to the price of a commodity such as gold or silver. The value of fiat money is largely based on the public’s faith in the currency’s issuer, which is normally that country’s government or central bank.
The Federal Reserve bank, or the ‘Fed’ for short, is the central bank in charge of monetary and financial stability in the United States. It is part of a wider system – known as the Federal Reserve System – with 12 regional central banks located in major cities across the US.
Fair value has two meanings to investors. Generally, it is used to mean the value attributed to stock by an individual investor or broker but in futures trading, it can refer to the predicted price of a market which is reflected in the cost to open a position.
In trading, exposure is a general term that can mean three things: the total market value of your trades at open, the total amount of possible risk at any given point, or the portion of a fund invested in a particular market or asset.
An exchange is an open, organized marketplace for commodities, stocks, securities, derivatives, and other financial instruments. The terms' exchange and market are often used interchangeably, as they both describe an environment in which listed products can be traded.
Exchange-traded products, or ETPs, are a variety of financial instruments that are traded throughout the day on national exchanges.
ETF stands for exchange-traded funds, a type of investment security that is bought and sold on exchanges.
Equity options are a form of derivative used exclusively to trade shares as the underlying asset.
In trading, equity can mean several different things. However, it usually comes down to the ownership of an asset without any debt involved.
EDSP stands for exchange delivery settlement price, and refers to the price at which exchange-traded derivative contracts are settled. Stock exchanges use EDSP to calculate the amount that each party to an options or futures contract owes at the time of that contract’s expiry.
A dividend is the portion of the profit that a company chooses to return to its shareholders, usually expressed as a percentage.
Depreciation is the term given to the decline in an asset’s value, either due to market conditions or other factors like wear and tear. It is the opposite of appreciation.
A derivative’s delta is defined as its price movement in relation to the change in the price of its underlying asset. It can also sometimes be referred to as a hedge ratio and is most often used when dealing with options.
The debt ratio is an indication of how much debt a company is holding when compared to the value of its assets. It can also be applied to individuals: in which case it is the cost accrued by their debt compared to total income each year.
Day trading is a strategy of short-term investment that involves closing out all trades before the market closes.
Custodian has a particular significance in relation to IG's platform. Here, we define custodian in general investing and explain what it means to you when trading with IG.
A currency peg is a governmental policy of fixing the exchange rate of its currency to that of another currency, or occasionally to the gold price. It can sometimes also be referred to as a fixed exchange rate or pegging.
A currency future is a contract that details the price at which currency could be bought or sold and sets a specific date for the exchange.
Currency depreciation is the decline of a currency’s value relative to another currency. It specifically refers to currencies in a floating exchange rate – a system in which a currency’s value is set by the forex market, based on supply and demand.
